CURRENCY News: AUD, NZD Stronger; GBP Weaker Vs Euro

by Jet Encila on January 18, 2012 8:26 am

FOR THE past 24 hours, the New Zealand Dollar has been among the most stable currencies after better-than forecast Chinese data lifted trade sentiment late afternoon, yesterday.

The Kiwi had a robust performance after it was reported that China’s economy improved in the final three months of 2011, hitting highs near the 0.7899 mark by the close of local trading.

Overseas, risk sentiment was high all over the Euro Zone and USD/NZD hit levels above 0.8024. The pair inched back to its earlier level of 0.7889 versus the US dollar ahead of a slow day on the calendar.

The NZD lost some momentum earlier in the session to 0.7679 when it opened unchanged versus the AUD before it claimed losses later in the day at 0.7709.

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Gaining ground

Against its US dollar counterpart, the Euro gained some ground for the first time in 3 days after Germany’s investor sentiment posted its largest gain in the index’ 20-year history.

The Centre for European Economic Research reported gains of 32.3 points to negative-21.7 and the share currency moved to 1.2799 after surging higher in the day due to better-than forecast growth of China.

Gaining momentum likewise from a plunge in Greek and Spanish borrowing cost and over-subscribed sales for the European Financial Stability Facility, trade concerns eased with regards the capacity of Euro Zone nations and the fund to increment debt.

The US dollar, unable to keep a hold on these gains, rallied to claim lost grounds as it was assisted along by better-then anticipated reading for manufacturing volumes in the New York area.

GBP weaker

In other currencies, the GBP fell versus its Euro counterpart and has experienced very few gains versus the US dollar after yearly inflation fell to 4.1 percent, from 4.7 percent in overnight trade.

This sluggish inflation figure has raised speculations that the Bank of England could be forced to loosen its ruling on financials by extending its quantitative alleviation programs.

The GBP managed to rally to 1.5399 versus the greenback after Spain and Greece’s bond auctions heightened risk sentiments.

AUD stronger

Meanwhile, risk was back on trading yesterday and the AUD bounced higher together with other commodity-connected currencies. After opening the session just over 1.0299, the AUD soon rallied towards 1.0401 after it was announced that China’s economy grew higher than expected in the fourth quarter of last year.

China’s continuing growth bodes well for the exports of Australia and positive investor sentiment saw the local unit inch towards 1.0389, eventually reaching highs of 1.0440.

Risk sentiment remained high overseas courtesy of Germany’s trade sentiment and better-than forecast bond auctions in Greece and Spain.

Positive manufacturing figures from the United States strengthened the USD. The AUD, trading lower, opened at 1.0359 ahead of the Westpac Consumer Sentiment Survey released yesterday.

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